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NAD gives further shape to its advice on use of native advertising

We will first tell you what you need to do if you are engaged in native advertising and wish to avoid coming within the busy lens of the NAD monitoring program. For those who are interested in the debate around this issue, we will then tell you why we, respectfully, disagree with the NAD’s views on this topic, again (see here and here, prior blog posts on qualcomm and esalon).

If you are an advertiser (or an advertiser’s lawyer more likely) working with web publishers to curate, write, or edit articles that review your product or more generally you would like to see published around your advertising copy‎, you have gone native. If you have not gone down this path yet, all of your marketers are plotting to do so, and thus you will want to be proactive. NAD has previously articulated that if you sponsor articles that generally relate to your product or attributes you want associated with your product, in its view, the connection between the advertiser and publisher must be disclosed. In its most recent decision, NAD communicates that if there is such a connection it must be disclosed even if it would be obvious to reasonable readers. So unless and until the FTC provides some guidance around when it believes disclosure would and would not necessarily be required, following up from its Blurred Lines workshop, the NAD view is the de facto law of the land, and we can think of no situation when disclosure would not be necessary. Maybe if an advertiser paid to sponsor a series that had nothing to do with its product, product category, or an attribute or feeling the advertiser hoped would be associated with its product. NAD has not brought that case yet and we doubt they will. Simply because they will not find such an example. Ever.

NAD’s most recent decision in this area addresses a situation not just of attempted brand integration but involves a publisher with a recognize brand and loyal following, Shape Magazine, becoming a marketer and launching a line of Shape branded fitness and health products that it would advertise, including within Shape magazine. In the September 2013 issue of the magazine, the letter from the editor announced this launch of the Shape line and promise to discuss the products within the pages of Shape. The magazine had an article captioned “news” called Water Works about the benefits of hydration‎ and called out the new Shape Water Boosters as a way to add flavor to ordinary water. About ten pages later (not contiguous to the article) there were full page ads for the product. Shape said the connection between the magazine and the product was clear, so per the Endorsement Guides no disclosure was needed. NAD disagreed. Well, it agreed the connection was likely understood by consumers. But NAD felt because the article was called “news” that consumers would attach different significance to the recommendation and might believe that the writer of the article was independent from the Shape water folks.

We do not understand how a reasonable consumer reader who likely understands and appreciates the connection between the publisher and the advertiser would nonetheless be confused and perhaps credit the recommendation more highly. Shape nonetheless agreed to remove the “news” heading from content that discusses its branded products. It is unclear if the “news” heading was the bugaboo or if calling the piece an “ad” would be required. NAD also did not go down the path of advising how or where disclosures should go other than to say disclosure at the beginning of the magazine would not suffice as clear and conspicuous. We understand there are several more native advertising cases in the NAD pipeline so stay tuned.

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